Opinion

Reforms to rental housing

David Smith
Written by David Smith

As MPs got the chance last week to consider the long awaited Housing and Planning Bill for the first time, a number of themes emerged concerning private rented housing; that rents are too high, that tenants do not enjoy the stability they require, that the sector is somehow unregulated, and that more is needed to tackle criminal landlords.

The RLA wants to approach these issues based on evidence, pragmatism and a policy that works to support and help good landlords and tenants.

The RLA recognises that rents in some areas, especially in London, are too high. This is a result of a chronic lack of supply of housing across all tenures. However, recent research for Paragon Mortgages found that 65% of tenants believe their value for money is either ‘good’ or ‘very good’.

A recent report for the GLA Housing Committee concluded that across the whole of England: “private rents have actually risen below wages or CPI on average during the period 2006-2013.”

One of the key ways to stabilise rents is to encourage a culture of longer tenancies, not through heavy handed legislation but making it easier for landlords to offer longer tenancies.

Landlords clearly want to offer them. English Housing Survey data notes that the average length of residence for tenants in private rented homes is 3.5 years, with just 8% of tenants having been asked to leave a property by their landlord.

Where tenancies last longer, landlords will not generally increase rents by more than inflation to encourage good, rent paying tenants to stay in their properties. In other words, longer tenancies lead to more stable rents.

The Housing and Planning Bill could support longer tenancies by addressing a major problem in London, especially of leases in blocks of flats which prohibit tenancies of longer than a year. Amendments being suggested by the RLA would mean that landlords would be able to grant sub-tenancies of up to three years.

Supporting longer tenancies from good landlords relies also on a regulatory system that supports them while acting ruthlessly against criminal landlords.

There are over 100 Acts of Parliament containing over 400 individual regulations affecting the sector. It is clearly not, as some argue, under-regulated.

The problem lies in enforcement. Freedom of Information data compiled by the RLA and published recently in The Times has demonstrated the patchy and sometimes non-existent levels of enforcement activity by some local authorities who simply don’t have the capacity to root out those criminals operating under the radar.

The end result is that good landlords pay for licences and other initiatives and end up shouldering the costs for the behaviour of bad landlords. Not only is this unfair, it fails to protect those vulnerable tenants at the hands of exploitative landlords.

The Housing Bill’s provisions for new banning orders and a database of criminal landlords sound good in principle, but in reality will not succeed under the current system as they rely on enforcement activity to trigger their effects.

It is time to introduce the polluter pays principle. Local authorities should be able to retain the fines they receive for going after criminal landlords to finance enforcement activity.

We need also a systematic way of finding the criminal landlords. National registers and licences are the wrong approach. Only good landlords come forward to voluntarily make themselves known and pay the money for doing so.

We are calling on MPs to support Angela Watkinson MP’s amendment to the Bill that would make it compulsory for tenants to identify who their landlord or managing agent is and what their contact details are on council tax registration forms.

Tenants are already entitled to such information, and this system would mean the criminals could not avoid being made known. Where the tenant was not able to provide this it would give councils a clear flag to investigate the matter further.

Such a policy would provide a way of identifying landlords without expecting them to pay substantial sums of money for licences that achieve little.

The RLA welcomes the focus that the new Bill brings to rooting out criminal landlords. We have long believed that it is crucial that tenants are protected from those who provide unsafe accommodation. It is time that the debate focussed less on adding more powers to root them out and more on effectively using those already available.

Tackling criminal landlords – briefing on Housing and Planning Bill

Housing and Planning bill – RLA Written evidence

Housing and Planning Bill – Oral Evidence Tuesday 10th November 2015

About the author

David Smith

David Smith

David Smith is the Policy Director for the RLA and a Partner at Anthony Gold Solicitors. David obtained his degree and doctorate from the University of Wales, Aberystwyth in International relations before re-qualifying as a lawyer. He is known for his expertise in residential landlord and tenant law and has advised the Welsh Assembly, local government, and numerous landlords and tenants of all sizes.

4 Comments

  • The majority of my city centre tenants want a short term, up to 12 months and corporates want a break clause. Even foreign, state funded students only typically want one year with a possibility of renewal.

    Part of the danger, I think, is the absence of homogeneity in the PRS, the needs of HB sector enants may be totally diferent, we do not need a one shoe fits all.

  • You are right with all the items of rental periods. But I feel yet again you do not address the problem of bad tenants and the eviction process of non paying tenants, never mind the antisocial tenants who ruining the premises with no regard to the landlords investment. The laws are there for evictions but it has become a minefield
    to enforce these laws. At least you can evict end of tenancy after six month on bad tenants. Longer leases feed solicitors pockets. Germany has a nation of flat dwellers, I read their legislation it is simpler to follow and the law is not leaning in favour of the tenant.Simple don’t pay rent and you have no roof over you head. No decent landlord will evict a good tenant if the tenant is in difficulties with payments.
    If you owe the Bank money you are sure the bailiffs are coming. If you owe council tax the council has no qualms to employ the bailiff. You even go to jail for that. Yet the council has no investment in the property but collects money for services.
    Landlords need to get on an even footing with the tenant when things turn bad.
    London is a different country when it comes to property.

  • I couldn’t agree more with Rainer Gundlach’s comments. We hear endless stuff about bad landlords but never about bad tenants. I would be happy to offer longer tenancies if I could easily evict for non-payment of rent mid-term or other serious breaches, but in practice it can be incredibly challenging to do. Even evicting under section 21 is becoming increasingly complex. Just to lodge a court fee for section 21 now costs about £350. I urge RLA to focus more on this side of things. Strengthening rights for good landlords should be the necessary quid pro quo for strengthening rights for tenants.

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